Milk, blueberries, yogurt, Popchips, Comcast monthly bill? Yep. A growing roster of retailers now enable their customers to pay a variety of monthly bills at checkout. And, the benefits go well beyond customer convenience – increasing both foot traffic and impulse buys, especially for those consumers whose preferred payment method is cash. So, who has managed to turn cash into gold at the POS?
These days, merchants have a variety of methods available to them to enhance the “omnichannel” experience. Enabling consumers to shop and pay when and where they want easily can correlate into enabling their customers to pay bills, settle online purchases or transfer funds – and just within their own stores.
Often when a merchant lets customers conduct such services, it will relegate them solely to the customer-service desk. But why just there? Why not also enable the clerk at the checkout lane handle bill or online payments as well? And do so by accepting cash.
Many, in fact, are doing just that. They see it as an opportunity. That’s why Walmart, for example, is so focused prepaid card activations, bill payment and other services designed for consumers looking for enhanced convenience at a lower cost.
Store traffic down
Getting customers through their doors is becoming a bigger challenge these days, as stores are competing against the convenience and lower prices afforded through online sites that lack a brick-and-mortar overhead expense. Not every consumer, however, has a bank account, much less access to the Internet or a smartphone – or even to a credit or traditional debit card.
Millions of consumers, in fact, don’t have any of those, but they do have bills, and many also would like to do other things they can’t typically do easily or can do but at a relatively high expense, such as transfer money between accounts or to someone else, or use cash to buy digital goods and services. And for many of them, the point of sale is a convenient place to conduct such services.
Indeed, more and more merchants are making it possible for customers to do such activities at the point of sale. They are moving folks away from the customer-service desk and increasing efficiency by incorporating the experience into the typical buying customers already are doing in the checkout lane. In doing so, proponents say, merchants also increase the likelihood for repeat visits and bigger basket sizes at checkout.
Online and bill payments
Various vendors also are vying for merchants’ business as they look to tap into what typically has been an underserved consumer segment. Prepaid specialist InComm a year ago, for example, unveiled a product designed to enable billers, billing aggregators, eCommerce businesses, payment gateways and others to create their own cash-payment network via the InComm point-of-sale rails. In doing so, consumers can pay with cash at any InComm retailer for any type of service or bill.
With its Cashtie service, InComm is enabling partners to allow their customers to take care of those cash transactions at the checkout lane in their stores, just as they would pay for other products. Today, some billers are allowing their customers to use Cashtie to pay their balance via merchant POS systems.
Among the 12,000 participating billers include AT&T, Comcast, Dish Network and Toyota. Some retail locations support the billers’ payments at the point of sale.
Cashtie issues participating billers and biller aggregators that have its application programming interface (API) details for transactions via a barcode and transaction ID. Billers then send the payment barcode to the customer, who presents it to a cashier and pays. Cashtie then validates the biller’s rules for the transaction and either accepts or declines the transaction for the cash payment. It then immediately notifies the biller or bill-pay partner with all transaction details.
Similarly, PayNearMe, which, like various other bill- and rent-pay products as Softgate, Rezzcard, ZipZap and Qpay, is leveraging Cashtie to extend its retail network, using CashTie’s API to connect to Family Dollar’s point-of-sale system. PayNearMe also has direct integations with 10,000 7-Eleven and ACE Cash Express stores. After selecting an item online to purchase or a payment to make, customers select PayNearMe as the payment option, print a PayNearMe PaySlip or Card when prompted, and then pay at a local store.
Once the merchant scans the PaySlip, the merchant, renter, biller or any other participating payee is immediately notified of the payment, and the transaction settles immediately. For merchants, set-up costs from free to $499 and up, depending on the level of service. For the basic Express service, the charge can be 3.99 percent of the amount to the consumer, or 3 percent to the business. Transaction fees vary for the Pro and Custom services.
Payment products for sale
Various third parties also are enabling cash-based payments for online purchases and bill payments through the sale of specialized products sold instead of used at the point of sale. Such products similarly can drive more foot traffic into the sellers’ stores.
Ukash, for example, enables consumers to spend cash online, as it, too, removes the need to reveal personal financial information. Consumers may purchase Ukash codes in retail outlets such as shops and petrol stations. They then may use the unique 19-digit codes to pay directly on websites that accept Ukash transactions worldwide, or buyers may apply the funds to a prepaid MasterCard.
Ukash has more than 460,000 physical points of purchase, including 50,000 in the UK, and is available in more than 50 countries. The company doesn’t charge for using its service, though some merchants may assess a fee to get a Ukash code or to deposit Ukash.
Green Dot similarly is turning physical cash into electronic cash for use in making online purchases. Its MoneyPak prepaid payment product is sold at stores, including CVS/pharmacy, Dollar General, Family Dollar, Rite-Aid, 7-Eleven and Walgreens locations. Users may add $20 to $500 to a MoneyPak. When shopping online, the user selects Green Dot MoneyPak as the payment method at checkout, and they then enter their MoneyPak number. MoneyPak costs $4.95 or less.
PreCash’s recently launched Evolve Money works similar to using a gift card for online purchases. Consumers purchase Reloadit Packs or Evolve Pay Bucks PINs at such stores as Safeway, Randalls and Albertsons. Then they use the app to pay bills and load the funds during the checkout process.
Reloadit Packs can be purchased for $3.95, and Evolve Pay Bucks cost $3. Through the Evolve Money service, consumers may use the Pack or PIN with their smartphone, tablet or computer to make bill payments immediately for $1.50 per transaction or for free for standard two-day payment. The service, which targets cash-paying consumers, supports more than 10,000 billers for online or mobile payment.
“Many consumers prefer to use cash as a way to manage their money, but it often takes more time and costs more to do so, especially if they want to make an expedited payment,” Steve Taylor, PreCash CEO and president, said in the Evolve Money launch announcement. “Evolve Money gives people that pay with cash a way to save all of their bills in one place and the ability to track their payments. It’s an experience akin to paying bills online through a bank, but the payments are much faster.”
Funds transfers
Funds-transfer services are another add-on merchants can provide at the point of sale. Pangea Payments, for example, is creating a system that will support cash-to-cash international remittances via retail outlets, something that today is rarely supported at merchant locations. A specific launch date has not yet been publicly set.
“What we’re building is providing alternative cash-transfer locations for consumers,” Rahier Rahman, the company’s founder and CEO, said in a recent PYMNTS podcast interview. “We would enable a consumer to take $200 to a retail location and transfer those funds. And that doesn’t exist right now,” he said.
As Pangea builds its network, InComm is helping to distribute MoneyGram Xpress funds-transfer packages at its network of more than 225,000 retail locations, including grocery and convenience stores, pharmacies and mass merchandisers. InComm similarly is enabling Western Union to offer its GoCash service to consumers through those same locations.
Not to be outdone by third parties, some major retailers, including Kmart, Walmart and Toys “R” Us, themselves are enabling consumers to shop online from their websites but pay and pick up their purchases in their stores. As is the case with their arrangements with third parties providing online and bill-payment services at the point of sale, the goal is to get more customers in their stores in the hope they will impulse buy while there.
Target, which also has been affected by declining stores sales, is testing different delivery methods to help keep up with market-demand changes. The company has been testing store pickup of online-purchased items with staff in Minneapolis, and it had planned to expand that test to include customers, providing $10 rush delivery in Boston, Minneapolis and Miami, Kathee Tesija, Target chief merchandising and supply chain officer, told analysts during a recent earnings call.
“Based on our team-member response and the feedback that they gave us, I think that this will also resonate with our guests,” she said.